A dearth of new listings has hindered the US housing market since the onset of the COVID-19 pandemic. Spurred by record-low mortgage rates, existing home sales in 2020 increased to their highest level in over a decade. But the mismatch between supply and demand now threatens to sideline buyers on a budget.
In January, inventory declined 26 percent annually, causing home prices to rise accordingly as competition intensified. However, a new Zillow survey indicates that hope could be on the horizon for the nation’s struggling home buyers, who face regular bidding wars and ballooning price tags.
Seventy percent of homeowners reported that they would be “mostly or completely comfortable” moving to a new home following widespread vaccine distribution. This stands in contrast to the 52 percent of homeowners who would be willing to relocate under the current public health conditions. The difference between the two polling groups represents about 14 million homes, which could potentially hit the market once the majority of Americans have been inoculated.
About four in five homeowners said that mass vaccination efforts would make them more likely to move. Daily headlines pointing to a seller’s market have also boosted homeowner confidence, with 69 percent believing that they could sell their home for a profit and within their preferred timeline (63 percent). Boomer and Silent Generation homeowners were especially optimistic about their returns, with 75 percent stating that they were “quite confident” they’d net a profit.
Millennial and Gen Z homeowners were more inclined to move within the next three years. Thirty-seven percent said they were planning to climb up the property ladder, and one in four reported that the pandemic influenced their decision. By comparison, only 15 percent of Gen Xers and 9 percent of Boomer and Silent Generation homeowners said that COVID-19 impacted their plans to move.
Just over a quarter of urban homeowners intend to sell within the next three years, compared to 18 percent of suburban and 14 percent of rural homeowners. One in four urban dwellers said that “open season” for vaccine doses would affect their decision to move, versus 12 percent of suburban and 11 percent of rural respondents.
“We expect that the vaccine rollout will likely boost inventory, as sellers become increasingly willing to move despite Covid-19 — resulting in greater numbers of new listings beginning this spring,” said Chris Glynn, principal economist at Zillow.
“That injection of inventory could give buyers more options and breathing room in a competitive market. The vaccine, however, will also likely add to already-strong demand, given that most sellers will become buyers as they trade in for a home that better suits their new needs.”